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Capital Misallocation, Ownership and China’s Manufacturing TFP
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TitleCapital Misallocation, Ownership and China’s Manufacturing TFP  
AuthorLi Xuchao,Song Min and Jin Xiangrong  
OrganizationZhejiang University 
Key WordsOwnership, TFP, Misallocation; Reform of SOEs 
AbstractTFP lose can be resulted from capital misallocation. From a perspective of ownership, we decompose aggregate TFP lose into three parts, misallocation within the SOEs group, misallocation within the non-SOEs group, and misallocation between the two group, and then we conduct a counterfactual analysis to find the best way of reallocation. We find that: (1) TFP distribution of SOEs are converging to that of non-SOEs, however, allocation within SOEs group are much less efficiency than that within non-SOEs group, which is an important point to explain why aggregate TFP of SOEs is lower than that of non-SOEs; (2)the weight of non-SOEs in China’s manufacturing industries grows so fast and the allocation efficiency of non-SOEs decrease so slow that misallocation with non-SOEs group contributes most to total TFP lose; (3) reallocation within non-SOEs group can increase aggregate TFP by 21.7% in 2007, which is the best way of reallocation. 
Serial NumberWP1193 
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